Peter Thiel’s plan to become CEO of America

By
Samuel Hammond

August 3, 2016

Billionaire venture capitalist Peter Thiel turned a lot of heads when it was discovered he would be delegating for Donald Trump. Some even thought it must be a different Peter Thiel. The intrigue only rose when it was confirmed he would deliver a speech forcefully endorsing Trump at the Republican National Convention. So Silicon Valley tuned in, looking for an answer. Instead, they were left “dazed and confused” by what they heard, according to one report.

To my eye Thiel’s speech may have been surreal, but nothing about it was confusing. As some have already noted, Thiel clearly wants to modernize the GOP’s outlook on the LGBT community, and to move the party beyond its small government Reaganism into support for things like major infrastructure and R&D programs.

But these are both small beans compared to what I see as Thiel’s main purpose (and gamble) in endorsing Trump: Peter Thiel see’s a Trump presidency as his pathway to be become the shadow CEO of the United States of America.

Persecution and the Art of Investing

Thiel seemed out of character. Clearly nervous, he spoke hastily instead of at his normal, more considered tempo, and with far more grandiose and incautious rhetoric than what he’s known for. With wide, slightly terrified eyes, he recapitulated his well known view that technological progress has stagnated (though without much indication of how a Trump presidency would help) and declared himself proud to be both gay and Republican, before abruptly speeding off stage as if he had somewhere else to be.Appearances aside, why of all people would the co-founder of PayPal and notorious libertarian be throwing his weight behind someone as controversial and volatile as Trump? Trump’s core two issues, trade and immigration, are not known to be big concerns for Thiel. If anything Thiel, like many in Silicon Valley, wants dramatically more skilled immigration. Thiel is from an immigrant family himself. He once even pledged funding for a scheme that proposed doing an end-run around immigration quotas by hosting foreign born tech founders on an anchored ship in the international waters off San Francisco. So much for law and order.

But before chalking it up to raw contrarianism, another one of Thiel’s infamous character traits, a closer look at his philosophical fixations and theory of entrepreneurship reveals a method to his madness. I admit that this is speculative. But in the tradition of Leo Strauss, Thiel sees value in layering meaning for different audiences — which opens him up for a more speculative interpretation.

For starters, Thiel is an acolyte of the late French social scientist and philosopher, René Girard. Girard is most famous for his theory of “mimetic desire,” which asserts that humans invariably borrow their desires from other people, both to imitate and to impress. Far from being an knee-jerk contrarian, Thiel’s investment philosophy, laid out in his book Zero to One, is about trying to deliberately transcend the desire for imitation, to be the proverbial “one” who can then reap monopoly profits.

Mimetic desire reveals itself in “social desirability bias,” the well-founded tendency of survey respondents to say the things and check the boxes that will make them seem more favorable to their peers, rather than their true, autonomous belief. But if enough people shun an idea because of fear of being judged or to go along with the crowd, it naturally creates a profit opportunity. The reverse is also true. If getting an MBA or law degree come with a lot of social status, it’s best to avoid those things, Thiel has argued, because you sacrifice a shot at true greatness by entering a crowded field.

Supporting Hillary Clinton is therefore a lot like starting a restaurant. It’s socially desirable — look no further than the dozens of celebrities, comedians and musicians who participated in the Democratic National Convention. But endorsing something popular comes with scant margin besides the approval of one’s peers and being at the center of a positive social nexus. If voice is what you want, Clinton already has too many backs to scratch, favors to return, and quids to pro quo.

Trump, on the other hand, is starved for elite support. Indeed, he can barely marshal the elites within his own party. So why wouldn’t Thiel seize a once in a lifetime chance to go from zero to one, to gain significant influence over the potential next POTUS at the cost of mild embarrassment?

Qualification Reservations

When the New York Times reported that Trump tried to sell John Kasich on being his running mate by offering him full control over both “domestic and foreign policy,” it revealed something about Trump’s management style: He delegates. It’s likewise no secret that his kids have been running much of his campaign.

This helps to explain the qualification paradox noticed by Timothy B. Lee, who writes that “Peter Thiel’s argument for Donald Trump makes no sense. … It’s hard to see how electing Donald Trump — a man not known for his managerial competence or his mastery of policy details — could make government competent again.” The only explanation, according to Lee, is that Thiel wants Trump to “blow up the system and start over.”

Yet it’s not clear what blowing up the system entails, or how it helps Thiel. More likely, Thiel is gunning not merely to have the ear of the President, but to have significant delegated decision making power, too. Thus Thiel is not voting for Trump’s competence. He’s voting for his own.

Competence over what? Thiel’s speech contains a clue. In it, he argued that the America of the ’50s and ’60s was fundamentally high tech. It pushed against the frontiers of science, and integrated its civil service with the latest technology. The Apollo Project is a case in point. We decided to go to the moon and seven years later we did. Today, it takes seven years just to build a bridge; sometimes just to name one.

Fortunately, on these points Thiel happens to have some answers. Through Founders Fund, Thiel has invested tens of millions of dollars into Space-X, the Elon Musk’s rocket company that’s planning a manned trip to mars. And Palantir, Thiel’s $20 billion analytics company, has hundreds of millions of dollars in U.S. government contracts to help federal agencies like DHS and CIA integrate and structure data. As Thiel concludes, “it would be kind to say the government’s software works poorly, because much of the time it doesn’t even work at all.”

The phrasing is important, as it may be a direct reference to the DCGS-A, or Distributed Common Ground System-Army, the U.S. Army’s system for integrating and disseminating intelligence, surveillance and reconnaissance across all levels of the Army. The system is notoriously bad, with ground commanders describing it as “unwieldy and unreliable, hard to learn and difficult to use.”

Thiel wants Palantir to replace DCGS-A, and for good reasons. When the Army deployed Palantir’s technology in Afghanistan as part of a “Forward Operating Assessment” in 2012, 96% of surveyed personnel described it as “effective in supporting their mission.” Some units continue to use it on an ad hoc basis. As one officer was reported as saying, “Palantir actually works. When DCGS actually works, we’ll be ready to use it.”

Yet the Army has spent over $6 billion developing DCGS-A and training users in “overcomplicated, lengthy classroom instruction,” and doesn’t want to just let it go. So last month, as the U.S. Army solicits bids for a second phase in its development, Palantir revealed their intent to sue. Palantir alleges the Army’s solicitation is “unlawful, irrational, arbitrary and capricious” for failing to entertain their evidently superior software. As Bloomberg reported, at stake “is a potential $206 million contract, which is the first portion of what will likely be a multi-year, multi-billion dollar data gathering and visualization system that serves as the Army’s intelligence hub.”

It’s been a tough year for Palantir, having lost some big clients like Coca-Cola, American Express, and Nasdaq, so it’s a contract Thiel desperately wants. And a contract a Trump Commander in Chief would help him get. Why? Because Trump only surrounds himself with the best.

Corporate Feudalism

Find in any country the Ablest Man that exists there; raisehim to the supreme place, and loyally reverence him: you have a perfect government for that country; no ballot-box, parliamentary eloquence, voting, constitution-building, or other machinery whatsoever can improve it a whit. It is in the perfect state; an ideal country.

These are the words of 19th century Scottish essayist Thomas Carlyle, another forceful advocate of government by the best.

It’s also the passage the infamous neoreactionary blogger, Mencius Moldbug, real name Curtis Yarvin, published on the occasion of Steve Jobs’s death.

The connection? In Yarvin’s view the government is just a corporation with some added layers of democratic pomp and circumstance. An effective government, like an effective corporation, needs a great CEO; an enlightened monarch; someone with vision, strength, and, importantly, the ability to delegate. “I can tell you exactly how decisions get made at Apple,” wrote Yarvin in a 2009 post. “First, Apple finds a man. Hires him, in fact. And having hired this man, it tells him: sir, this decision is yours.”

Similarly, when asked how he would fix the decaying U.S. government, Yarvin replied, “Find the best chess player you can find and give them the job.” That job being an unelected CEO of America, the nation qua shareholder corporation, who would exercise full sovereign authority to do to the Department of Education and DCGS-A what Steve Jobs did to Apple’s decadent and unproductive Advanced Technology Group in 1997 — retire all the employees and shut it down.

A startup is basically structured as a monarchy. We don’t call it that, of course. That would seem weirdly outdated, and anything that’s not democracy makes people uncomfortable. We are biased toward the democratic-republican side of the spectrum. That’s what we’re used to from civics classes. But the truth is that startups and founders lean toward the dictatorial side because that structure works better for startups.

I no longer believe that freedom and democracy are compatible. … A better metaphor is that we are in a deadly race between politics and technology. The future will be much better or much worse, but the question of the future remains very open indeed. We do not know exactly how close this race is, but I suspect that it may be very close, even down to the wire. Unlike the world of politics, in the world of technology the choices of individuals may still be paramount. The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism.

As his lecture notes indicate, monarchy is the other meaning of Zero to One. Or, as Trump put it, the idea that “I alone can fix it.”

Pundits have thus far misidentified the Great Man undercurrent in Trump and his supporters as latent fascism. The more accurate term may be corporate feudalism or enlightened absolutism (Make America Frederick the Great Again), an idea that also animates Thiel’s interest in Seasteading.

Feudalism classically involves a noble class of landholders known as Lords who hold complete dominion over their swath of land, or fiefdom. Trump, as a real estate mogul, already has most of the strappings of nobility, going so far as to name his youngest son Barron, a synonym for Lord.

Fiefdoms are home to vassals, peasantry who are granted basic protections and possessions in exchange for services rendered to the Lord. These are not quite the same as basic human rights or property rights, as they are contingent and accidental, not moral or meritorious. Hence Trump’s comfort with a liberal use of eminent domain.

Seasteading is the same idea as classic feudalism, but on platforms in the ocean. In theory, Lords and CEOs have an incentive to produce relatively good government in order to attract shareholders and vassals. And since what counts as good government may vary, vassals vote with their feet in order to opt into the fief or seastead that most aligns with their values.

Economists call this Tiebout sorting, a model that inspired a generation of libertarians to a kind of municipal fetishism which vastly overestimated the average person’s willingness to move, and vastly underestimated the potential for localized forms of tyranny. And in legal theory, it is called polycentric law, or the devolution of monopolistic statutory law into competing and even overlapping jurisdictions.

While modern city states like Singapore provide some evidence that a benevolent, technocratic dictator can indeed produce a flourishing society along a corporate model, and the success of Hong Kong, and special economic zones like Shenzhen and Xiamen, show experiments in legal devolution have a lot of merit, this risks a kind of sharpshooters fallacy. Namely, it highlights the successes while ignoring the many failed states and other experiments in less-than-benevolent dictators, as well the hidden centralism underwriting successful, non-anarchic implementations of legal devolution. More quantitative approaches, in contrast, continue to find democracy has a “robust and sizable” pro-growth effect.

Nonetheless, Thiel’s fascination with feudalism extends from land and sea into cyberspace, with his investment in Urbit, a Curtis Yarvin project to embed neoreactionary social theories into a layer of the internet. Urbit does a lot of things, but its main function is to create a decentralized digital title chain for network addresses, like tradable peer-to-peer IP addresses. Since its namespace is a scarce resource not unlike land, it’s unsurprisingly modeled on feudal principles, with sovereignty distributed polycentrically across a constellation of rigidly hierarchical communities.

Global Rebalancing

Whether or not Thiel is an actual neoreactionary, strictly speaking, is beside the point. What’s important is that he has consistently identified “freedom” with a version of corporate feudalism writ small, and has hinted at it being time for a version to take hold nationally, if not internationally.

Trump’s plan to dismantle NATO and reverse the U.S.’s historical policy of internationalism would do just that, and is also consistent with Thiel’s past support for NATO skeptics like Ron Paul. Trump’s stated foreign policy would rebalance the globe away from the U.S. hegemon as a beacon of liberal cosmopolitanism and exporter of democratic values, in favor of the authoritarian values of China and Russia.

China and Russia run on crude versions of corporate feudalism already, with Xi Jinping and Vladimir Putin as their respective CEOs. And despite being both former communist countries, each exports value systems that are far less egalitarian than the United States’ — and far less “politically correct.”

According to Thiel, “Properly understood, political correctness is our greatest political problem,” by which he means Western society’s quasi-theological commitment to liberal egalitarianism. This in turn has led America’s elite to “The Diversity Myth” that multiculturalism works, denial of innate gendered or racial differences in individual talents, squeamishness around anything resembling eugenics, and the marginalization of religious tradition.

In contrast, China, led by a “Red Nobility” of privileged princelings, has gained the technological edge in genomic engineering by casting fears of uncomfortable findings aside. Meanwhile, Putin has pushed the revival of a pre-Soviet mythos based on the idea of Russia as a distinct Eastern Orthodox civilization which genuflects to ritual, hierarchy and traditional gender roles.

Thus when Donald Trump claims he wants to “Make America Great Again,” it’s not merely a nostalgia for the Reagan Era, or the last hurrah of a shrinking, white working class. Rather, it’s that the narrative of decay, as echoed in Thiel’s sentiments about modernity and government incompetence, necessarily creates a corollary narrative of return or revival.

Like when Putin returned to revive an ailing Russia in 2000.

Or when Steve Jobs returned to Apple in 1996.

Each supplanted the narrative of decline with a new myth, be it Orthodox Christianity or Apple’s reputation for design. Thus, as Trump assumes the Kingly role of a ceremonial figure head, that leaves Thiel and company to fill out the rest of the C-Suite and pursue the ambitious task of restructuring America’s decadent institutions from within, including, perhaps, the creation of a new American myth as well.

But if that isn’t for you, like a mismanaged Seastead, you always have the option to leave.